New luxury is anything from a caffelatte to a massage or a designer kitchen, says Michael Silverstein, whose new book, Trading Up, has struck such a chord he has appeared on Oprah Winfrey's chat show.

"There's this emerging middle class that has a lot of money in their pockets and they are wise. They understand what they want and why," said Silverstein during a trip to Sydney last week.

An example of trading up would be paying $3 for a latte instead of $1 for canteen coffee. Whether it's the daily caffeine hit, a weekly meal out or something for the house, Silverstein said the average worker would consciously trade up in three or four categories and trade down for everything else, buying home brands and bargains.

"They are frugal, they balance their budget and at the same time they dream a lot," he said.

For his book, Silverstein, a Boston-based consultant, asked shoppers what they splurged on and why. One 28-year-old woman, Lesley, spent $US8 ($10.50) a day on a gourmet sandwich, even though she earned $35,000 a year.

She told him that every time she took a bite, she closed her eyes and dreamt of being with her boyfriend in Italy.

Silverstein calls Lesley's experience questing - when your purchase takes you out of the dreary job and gives you a break.

Whereas old luxury was about status and exclusivity, new luxury is about emotion.

Tim Pethick was thinking this when he set up Nudie, a natural fruit juice company, just over a year ago. "My observation would be that there are a whole lot of affluent middle class people who really want to spoil themselves," he said. "They want quality, something distinctly different, and they look on indulgence not as an annual award but almost as an hourly award."

At $3, a Nudie juice is twice the price of a processed one. The juice is what Silverstein calls an accessible super-premium product - a little treat.

At the other end of the spectrum are "masstiges" - affordable products that bridge the gap between mass market appeal and prestige, such as Louis Vuitton canvas totes and the cheaper Mercedes ranges.